Taxation of Chargeable Gains Act 1992 section 46

Meaning of "close company", "qualifying investor" and "direct or indirect participator"

Section 46 defines three key terms used throughout the Schedule dealing with UK property rich collective investment vehicles: "close company", "qualifying investor", and "direct or indirect participator".

• A close company is determined using the standard Corporation Tax Act 2010 rules but with important modifications — notably, non-UK resident companies can be close companies, and fund managers or general partners in collective investment schemes do not trigger close company status merely through their voting power.
• A qualifying investor is broadly a person falling within designated categories in section 528(4A) of CTA 2010, provided the relevant collective investment vehicle either meets the non-close condition or the genuine diversity of ownership condition, or is a qualifying fund or company for which an election under paragraph 12 has been made.
• A direct participator is someone who is a participator under Part 10 of CTA 2010, while an indirect participator is someone who holds a share or interest in a company's capital or income through one or more intermediate corporate bodies in a chain.
• For these purposes, "body corporate" is given a wide meaning and includes offshore collective investment vehicles that are treated as companies under the Schedule, as well as any other entity treated as a company under the wider Act.